Bank deposit market: modern status and consumer preferences

Possibilities, not threats: turbulent development at the world financial markets is of no serious danger for the banking sector. After a long period of macroeconomic stability the Russian banking system has reached the trajectory of sustainable development. Presently domestic banks are less vulnerable to outside risks than it may be expected by many. The world financial instability may cause failures in supporting liquidity (although CB has acquired efficient command of dealing with the issue) and losses in market and currency risks (which, according to our conservative calculations, would not exceed 7% of the banking system capital).

New sources: the banking sector would be supported by the state investments, export flows and private savings. The Russian economy may secure powerful inflow of resources to the banking system, which gives us a competitive edge. The state investments to economy through institutes of development will cushion negative impact of troubled finances at the international arena. Besides, the contributions from Russian exporters will remain at the significant level. Also, the system seems to be potentially promising for private investments. The deposit base increase will notably contribute to aggregation of assets. We envisage increased individual deposits in 2008 from 35 to 38-40%. By the end of 2008 we expect corporate deposits in banks to be about 10 trln rubles, individual deposits - 6.6 trln rubles.

No deceleration is expected: new resources would secure speedy sector development. Due to high interior potential the banking system assets would grow with the last year speed (43%), or even faster (45-47%).

The speedy development may be blocked by risks of unstable national currency and turbulent world finances. Still, internal sources of growth together with macroeconomic achievements would help banks and regulators to damp any strong blow with high efficiency.